The Amazon Pink Dolphin’s Voice: Chevron loses in U.S. Courts

Chevron loses bid to have Ecuador case heard by U.S. Supreme Court

Chevron Corp. has lost a bid to have the U.S. Supreme Court consider its call for a worldwide ban on attempts to collect on a controversial $19-billion (U.S.) environmental judgment levelled against the company in Ecuador.

The decision comes with lawyers in Canada poised to battle in a Toronto courtroom next month over an attempt by the Ecuadorean plaintiffs to seize Chevron’s considerable Canadian assets to cover at least part of the massive judgment – a judgment the oil giant dismisses as fraudulent.

In the latest twist in a tangled legal saga, Chevron was trying to revive a preliminary injunction issued last year by a federal judge in New York. That injunction was later overturned on appeal. It purported to block the plaintiffs and their lawyers from trying to enforce the 2011 Ecuadorean court ruling not just in the U.S., but anywhere outside of Ecuador.

The U.S. Supreme Court refused on Tuesday to hear the case. It issued no reasons, as is customary, leaving the appeal court decision that quashed the injunction in place.

The news comes as lawyers for the plaintiffs – a group of villagers in the Amazon rainforest – have stepped up their campaign to force the oil company to pay for environmental damage from oil pollution in the Lago Agrio area of Ecudaor.

Chevron, based in San Ramon, Calif., has said it has virtually no assets remaining in Ecuador, and the plaintiffs have vowed to chase the company’s assets elsewhere. Their first stop, earlier this year, was Canada.

In May, they announced they had retained prominent Toronto lawyer Alan Lenczner, of Lenczner Slaght Royce Smith Griffin LLP, to try to have the judgment recognized by the Ontario Superior Court and force Chevron to fork over its Canadian assets, which include oil sands holdings. The plaintiffs have also filed a similar collection effort in Brazil.

In sprawling litigation in the United States, both sides have accused each of fraud and bribery in connection with the Ecuadorean ruling, allegations they both deny.

Chevron said Tuesday in an e-mailed statement that the company was disappointed with the decision but “will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct in our pending [litigation] in New York and other proceedings.”

The plaintiffs’ say the ruling is the latest in a series of defeats for Chevron in U.S. courts.

“Chevron’s latest loss before the Supreme Court is an example of the company’s increasingly futile battle to avoid paying its legal obligations in Ecuador,” Aaron Marr Page, a lawyer for the Ecuadoreans, was quoted as saying in an e-mailed statement.

Chevron had asked the U.S. Supreme Court, with briefs filed in support from the U.S. Chamber of Commerce and other business groups, to review a U.S. Second U.S. Circuit Court of Appeals ruling from August, 2011, that overturned the original wide-reaching injunction.

The appeals court had ruled that Chevron could not pre-emptively launch a defence before the plaintiffs had actually tried to enforce their judgment. And the decision said a New York judge could not “declare a foreign judgment null and void for all purposes in all countries.”

But the appeal court did not rule on the merits of Chevron’s allegations that the plaintiffs’ lawyers engaged in fraud to obtain the judgment – allegations the plaintiffs deny.

The mammoth legal battle dates back to 1993, when residents of northeast Ecuador first sued Texaco Corp. in a New York court over what they alleged were decades of pollution in the Amazon jungle from oil wells drilled by the company. Chevron merged with Texaco, and inherited the legal fight, in 2001.

An Ecuadorean court recently increased the original $18.3-billion award to $19-billion.

Source: The Globe and Mail

Chevron fails to block $18 billion Ecuador judgment

WASHINGTON (Reuters) – Chevron Corp on Tuesday lost a U.S. Supreme Court bid to block an $18.2 billion judgment against it in Ecuador in a case over pollution in the Amazon jungle.

The Supreme Court did not give any explanation for its decision, which rejected Chevron’s appeal of a lower court ruling. The lower court in January had thrown out an injunction blocking enforcement of the Ecuadorean judgment.

The decision is the latest in a nearly two-decade conflict between the No. 2 U.S. oil company and residents of Ecuador’s Lago Agrio region over claims that Texaco, bought by Chevron in 2001, contaminated the area from 1964 to 1992. The battle has spawned litigation in numerous courts both inside and outside the United States.

Oil companies are watching the case closely because it may affect other cases accusing companies of polluting the areas where they operate.

Chevron claims that the judgment, imposed by an Ecuadorean court in February 2011, was fraudulent and unenforceable under New York law.

In March 2011, a federal judge in New York issued a worldwide injunction blocking enforcement of the judgment. But on January 26, the 2nd U.S. Circuit Court of Appeals in New York overturned the ban, finding that Chevron had been premature to challenge the judgment.
The 2nd Circuit said the oil company, based in San Ramon, California, could challenge it “only defensively, in response to attempted enforcement,” which the Lago Agrio residents had not attempted and might never attempt in New York.

The appeals court also said that the U.S. judge did not have the authority to stop courts in other countries from enforcing the judgment. The Ecuadorean plaintiffs are currently trying to enforce the judgment in Canada and Brazil.

In its appeal to the Supreme Court, Chevron said it was entitled to raise an anticipatory defense in U.S. courts to preempt any enforcement efforts.

It also said such defenses are necessary in light of the “disturbing trend” in which lawyers win big money judgments against U.S. companies in corrupt foreign courts, and then seek to enforce them in countries where the companies operate.

Chevron’s shares were up 32 cents at $117.94 on Tuesday afternoon.

“While Chevron is disappointed that the Court denied our petition, we will continue to defend against the plaintiffs’ lawyers’ attempts to enforce the fraudulent Ecuadorean judgment, and to further expose their misconduct,” Chevron said in an emailed statement.

The company is pursuing a racketeering suit against a New York attorney, Steven Donziger, a group of Ecuadoreans and environmental groups that helped win the judgment, accusing them of intimidation and extortion.

It has also challenged the judgment before an international arbitration panel under a trade agreement between the United States and Ecuador. The panel is scheduled to begin hearing the dispute in November.

The judgment included $8.6 billion of environmental damages, which an Ecuador court more than doubled because Chevron failed to make a public apology.

In July, damages in the case were increased to $19 billion.

Justice Samuel Alito, a conservative, did not participate in the Supreme Court’s decision to deny the appeal. The court’s order provided no reason.

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